Servicing responsibilities
Primary source
Verbatim text below is from the Electronic Code of Federal Regulations (eCFR), a public-domain U.S. government work. Always verify the current version with the eCFR before relying on it for any legal matter.
Full Text
The lender must service the loan in accordance with this subpart and perform the services contained in this section in a reasonable and prudent manner. The lender is responsible for the actions of its agents and representatives.
(a) Funds management. The lender must have a funds management system to receive and process borrower payments, including the following.
(1) All principal and interest (P&I) funds and guarantee fees collected and deposited into the appropriate custodial accounts.
(2) Payments to custodial escrow accounts for taxes and insurance premiums, assessments that might impair the security (such as ground rent), and reserve accounts for repair and capital improvement of the property.
(b) Asset management. The lender must ensure that the property securing the guaranteed loan remains in good physical and financial condition, in accordance with project management requirements contained in subpart H of this part.
(c) Management of delinquencies and defaults. Each month the lender must report to the Agency any delinquencies and defaults in accordance with subpart H of this part.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.